EU Pay Transparency Directive: What Small Companies Must Do

Most coverage of the EU Pay Transparency Directive is written for companies with 2,000 employees and a dedicated reward team. If you run 20 or 80 people, the consultancy fog reads like someone else's homework. It isn't. Several of the directive's duties apply to every employer in the EU regardless of headcount, and the transposition deadline passed on 7 June 2026.

First, prominently rather than in a footer: this is orientation, not legal advice. What binds you is your country's implementing act, which can be stricter than the EU text. Everything below is checked against the directive and current as of July 2026; for your specific obligations, ask counsel.

What it is, in five sentences

The directive exists to make the EU's long-standing principle of equal pay for equal work, or work of equal value, enforceable in practice by pulling pay structures into daylight. It was adopted in 2023 as Directive (EU) 2023/970, and member states had until 7 June 2026 to transpose it into national law (Article 34). Because it's a directive rather than a regulation, what binds you is your country's implementing act, and many countries are still finishing theirs, Poland among them. Its obligations split in two: transparency duties that apply to every employer from day one, and gender pay gap reporting that phases in by company size, starting at 100 workers. And it carries a stick: an employer that skipped the transparency duties and later lands in an equal-pay dispute has the burden of proof flipped onto it (Article 18).

Who reports what, by size

The reporting side (Article 9) phases in like this:

Two footnotes. National law can go further than the directive, so an under-100 company can't fully relax until its country's act is final. And every row of that table still owes the duties in the next section.

The duties that hit every employer now

Salary information before the interview. Applicants have the right to receive the initial pay or its range for the position, based on objective, gender-neutral criteria, in the vacancy notice or otherwise before the interview (Article 5). It arrives unprompted; the stated goal is an informed pay negotiation. Compliant looks like a real range you would genuinely hire within, published in the ad, the cheapest place for it. Non-compliant looks like the malicious-compliance ranges American state laws produced: ads offering everything from minimum wage to a lottery win. The directive pre-empts the trick in its own wording: the range must rest on objective, gender-neutral criteria, and a floor-to-ceiling span no criteria could produce fails on its face. Expect enforcers to read it as no disclosure at all.

No salary-history questions. You may not ask candidates what they earned in current or previous jobs (Article 5(2)). Compliant looks like the question removed from application forms and interview scripts, every interviewer briefed, and your recruiting agencies briefed too, since they ask it out of habit.

Pay criteria in writing, findable. Workers must have easy access to the criteria used to determine pay, pay levels, and pay progression, and those criteria must be objective and gender-neutral (Article 6). Member states may exempt employers under 50 workers from the progression part, but only that part. Compliant looks like a short written comp policy: what determines pay here (the directive's own factors are skills, effort, responsibility and working conditions, from Article 4) and how raises happen. Pay decided by what the founder felt that quarter stops being awkward and starts being non-compliant.

Anyone can ask how their pay compares. A worker can request, in writing, their individual pay level and the average pay levels, broken down by sex, for the category of workers doing the same work or work of equal value (Article 7). You have two months to answer, you must remind everyone of this right annually, and contractual pay-secrecy clauses are banned outright (Article 7(5)). Compliant looks like worker categories defined before the first request arrives, comp data you can query, and salary-confidentiality clauses stripped from your contract templates. Honest note for small teams: with three people in a category, an average barely anonymizes anything, and the directive doesn't carve small employers out of this duty. Watch your national act's guidance.

The gap-reporting math, honestly

Over the thresholds, you report (Article 9): the mean gender pay gap, the median gap, both again for complementary or variable components (bonuses, allowances, anything on top of base), the share of women and men receiving those components, the sex split in each pay quartile, and the gap per worker category, split into basic and variable pay. "Pay" is broad: salary plus any other consideration, cash or in kind (Article 3).

The headline gap is the difference in average pay between female and male workers, as a percentage of the male average. That is an unadjusted number. A company-wide gap is not proof of discrimination, and 0% is not proof of fairness. The figures with teeth are the per-category ones, because a category is, by definition, same work or work of equal value.

That's where the 5% trigger lives (Article 10). A gap of at least 5% in any category, which you can't justify with objective gender-neutral criteria and don't remedy within six months of submitting the report, forces a joint pay assessment: a formal pay review conducted with your workers' representatives. Management must confirm the report's accuracy after consulting those representatives, so the numbers can't be quietly massaged.

Where Poland stands (in flux)

Poland transposed in two phases and finished neither on schedule. Phase one is law: the Act of 4 June 2025 amending the Labour Code, in force since 24 December 2025, covers the recruitment duties (initial pay or its range for candidates, no pay-history questions, gender-neutral ads and titles). Phase two, the full bill with the right to information and gap reporting, is still in the legislative process: a first draft in December 2025, a revised one on 4 May 2026, nothing enacted as of this writing, and entry into force possibly slipping into 2027. Don't wait for the final text: the table above comes from the directive, and Poland's drafts so far shorten deadlines rather than extend them (the current draft answers a pay-information request in 30 days, not two months).

What to start collecting today

Even if your first report is due in 2031, you can't reconstruct pay criteria retroactively, and the right to information doesn't wait for reporting thresholds. Start now:

• Comp records per person with components separated: base, bonus, allowances, benefits in kind. The report wants them split; your payroll export probably doesn't.
• Worker categories: a simple job architecture grouping same work and work of equal value, using the four directive factors. This is the hardest artifact to produce under deadline pressure.
• The reason behind every pay decision, written down when it's made. "Retention risk, matched an external offer" noted in 2026 is evidence; the same sentence reconstructed in 2029 is fiction.
• FTE and hours data, since part-timers make naive averages lie.

We make an HR system of record (SquadBear), so we're biased, but the point stands for any tool: criteria, categories and decision notes need a home more durable than a spreadsheet named comp_final_v3.xlsx.

Related reading: how to roll out a policy people actually read, and prove they did, because the Article 6 comp policy is exactly the kind of document you'll want acknowledgment records on.